On the evening of March 16, 2026, China's retail industry was stirred by an unexpected development. Yonghui Superstores Co.,Ltd.'s private label brand "Quality Yonghui" published an open letter titled "An Open Letter to Sam's MM" via its official social media account, directly addressing the private label "Member’s Mark" of the warehouse club giant Sam's Club.
While the letter appeared cordial and put forward "seven cooperation proposals," its most critical and striking demand was: "Do not force suppliers to choose sides."
This is far from a simple war of words. As of the time of writing, Walmart, the parent company of Sam's Club, has remained silent. However, this sudden public challenge has brought the underlying battle for supply chain dominance in offline retail into the open. On one side is the former "fresh produce leader," which has reported losses for five consecutive years totaling over 11.6 billion yuan and is deep in restructuring based on the "Pang Donglai model." On the other side is the warehouse club dominator, which saw its sales exceed 140 billion yuan in 2025, a year-on-year increase of approximately 40%, and boasts over 10.7 million paid members, racing ahead in the Chinese market.
This clash between unequals,表面上看似是供应链资源的争夺，表面上看是争夺供应链资源，but is fundamentally a collision of business models at a crossroads in the transformation of China's retail industry. Yonghui's "roar" is not only an expression of its struggle for survival amid painful restructuring but also reveals the core logic of the retail endgame: whoever controls the supply chain controls the future.
The "exclusive dealing" dilemma: Is it a "moat" or a "monopoly wall"? Looking back to 2021, on the opening day of Carrefour's membership store, suppliers were allegedly "swept" to buy out inventory. At that time, both Carrefour and Hema jointly accused Sam's Club of engaging in "exclusive dealing." Four years later, Yonghui is replaying the same script, but this time the battlefield has expanded from the membership store format to the private label sector of traditional supermarkets.
In its open letter, Yonghui appealed: "Allowing suppliers to cooperate with multiple parties is an inevitable choice for industry development... Whether it is an overseas giant or a local enterprise, lawful operation is our common bottom line." The subtext reveals an intense desire for high-quality supplier resources and frustration after encountering exclusionary barriers.
To understand the intensity of this conflict, one must grasp the strategic importance of private labels for modern retailers. In the era of traditional hypermarkets, retailers acted as "sub-lessors," profiting from slotting fees and barcode charges paid by brand owners. Today, that model has become obsolete. Private labels not only mean higher gross margins (often reaching 30%-40%, far higher than consigned goods domestically) but are also a core weapon for building product barriers and fostering customer loyalty.
Sam's Club is the master of this model. Its private label, Member’s Mark, accounts for over 20% of its sales. Leveraging its global supply chain and strict quality control, it has created a slew of hit products like Swiss rolls, mochi, and roasted chicken. For suppliers, gaining entry into Sam's supply chain means not only stable orders but also an endorsement of quality.
However, it is precisely this "endorsement effect" that has sparked the dispute. Some viewpoints suggest that Yonghui is trying to "pick the ripe fruit." A senior retail analyst pointed out that after years of refinement and significant investment, Sam's has cultivated previously unknown factories into suppliers capable of producing high-end goods. Yonghui, by seeking to directly access these mature resources, aims to bypass the upfront cultivation costs and risks.
But for Yonghui, which is struggling in quicksand, there is no time to "start from scratch." Data shows that Yonghui is projected to report a net loss attributable to shareholders of 2.14 billion yuan for 2025, with cumulative losses over the past five years reaching a staggering 11.64 billion yuan. Its store count has plummeted from a peak of around 1,000 to approximately 400 by the end of 2025. In this race against time, rapidly strengthening its private label offerings by引入经过市场验证的成熟供应链 introducing proven supply chains seems to be the only viable path.
Thus, the矛盾因此激化矛盾 has intensified. Sources close to the matter indicate that Yonghui likely faced genuine pressure from suppliers being pressured to "choose sides," which directly triggered this public challenge. From a business logic perspective, Sam's is justified in protecting its "orchard." However, if it uses its market dominance to force suppliers to take sides, it crosses a regulatory red line. China's State Administration for Market Regulation has long clarified that restricting trading partners from dealing with others without just cause is prohibited under the Anti-Monopoly Law.
Intriguingly, three Sam's suppliers interviewed by media outlets denied facing "exclusive dealing" restrictions, noting that the industry consensus is that "customized products" do not equate to "exclusivity agreements." This reveals the subtlety of supply chain博弈博弈: giants are not competing for generic production capacity but for "customized capacity" tailored to specific parameters and molds. When a product bears Sam's logo, it inherently possesses an exclusive nature. What Yonghui wants is for factories with the same production capabilities to manufacture "premium versions" or "substitute versions" for it, which directly challenges Sam's unique foundation.
The strategic imperative of private labels: From model collision to survival breakout The confrontation between Yonghui and Sam's should not be simplistically dismissed as a commercial dispute. Behind it lies a fierce clash between two evolutionary paths in retail, prompting deep reflection on the ultimate form of the retail industry.
Previously, Sam's and Yonghui operated in different lanes: one targeted middle-class families with low-frequency, high-average-transaction-value purchases (over 800 yuan per transaction); the other focused on daily community needs with high-frequency, low-average-transaction-value purchases (under 200 yuan per transaction after restructuring). However, these two parallel lines are now beginning to intersect.
After establishing a strong presence in tier-one cities, Sam's is accelerating store expansion and utilizing fulfillment centers to move into lower-tier cities, encroaching on market share traditionally held by premium supermarkets and even community fresh produce stores. Meanwhile, after adopting elements of the Pang Donglai model, Yonghui has significantly increased the proportion of 3R categories (ready-to-cook, ready-to-heat, ready-to-eat) like baked goods and prepared foods. Its restructured stores, with their vibrant atmosphere and improved product offerings, now possess the appeal to attract middle-class consumers.
This convergence has led to a head-on collision at the supply chain crossroads. Yonghui has declared its ambition to become "the Chinese Sam's Club following the Pang Donglai model." In this sense, Yonghui's challenge to Sam's is actually a charge towards its own stated goal and a declaration to the market: when it comes to building high-quality private labels, Yonghui is serious, even willing to openly confront the industry titan.
However, the理想丰满，现实骨感理想很丰满，现实很骨感。gap between ambition and reality is wide. Sam's moat is deeper than Yonghui might imagine. Sam's success lies not only in product selection but also in its decades-long symbiotic relationship with suppliers. An industry insider revealed that Sam's imposes extremely strict requirements and continuous improvement pressure on its suppliers. While this "high-pressure" environment is demanding, it also forces suppliers to constantly evolve. When Yonghui attempts to "intercept" these suppliers with more lenient terms and a faster path, it inevitably encounters significant resistance.
An even sterner challenge is whether Yonghui can achieve the same quality and efficiency even if it secures the same factories. Mastering the supply chain involves more than procurement contracts; it encompasses a complex system of logistics and cold chain, inventory turnover, quality control standards, and more. Although Yonghui has greatly improved its inventory turnover rate through restructuring, the gap remains significant compared to an opponent like Sam's, which has perfected supply chain efficiency.
This public challenge also highlights the predicament of suppliers caught in the middle. On one hand, over-reliance on a single giant like Sam's means losing bargaining power; losing such orders could be catastrophic. On the other hand, embracing emerging channels like Yonghui could anger their existing major client, risking delisting.
Yet, the other side of the coin is that Sam's own foundation is not impregnable. 2025 was dubbed Sam's "crisis year," with incidents ranging from suspicions of excessive pesticide residues in freeze-dried strawberries to food safety scares like finding a live mouse in a mochi box. Its proud quality control system has faced repeated challenges amid rapid expansion. As the store count grows from 60 towards 100, and supplier audit cycles are compressed from 90 days to 45 days, the luster of Sam's "curated selection" gold standard is being diluted. This presents an opportunity for Yonghui and others, and gives suppliers a reason to reconsider their options.
A more incisive view suggests that the "fight" between Yonghui and Sam's is essentially a systematic reshaping of the consumer brand landscape by channel-owned brands. When retailers, leveraging data and scale, identify the best OEM factories, slap on their own labels, and sell at lower prices, the premium space for traditional consumer brands is severely compressed. In this strategic move towards "de-branding," whether it's Sam's Member’s Mark or Yonghui's "Quality Yonghui," the essence is the fight for the power to define products. Ultimately, shelves may be left with only two types of goods: channel brands and those irreplaceable leading national brands.
Yonghui's open letter acts like a flare, illuminating the shift in the focus of competition within China's retail industry—from hand-to-hand combat at the storefront to covert warfare upstream in the supply chain.
For Sam's, whether to respond publicly may be less important than how to repair its increasingly fragile quality control chain while maintaining its breakneck pace. For Yonghui, while the public challenge might win some sympathy, the rules of the商业世界的法则商业世界 are ultimately harsh. Under the shadow of continuous losses, what it needs is not an open letter, but genuinely compelling products that secure a permanent place in consumers' shopping carts.
The truth behind this "exclusive dealing" saga will not be decided by a war of words. The verdict will be written by the flow of supplier orders, the votes cast by consumers' spending, and regulators' enforcement of fair market practices. Regardless of the outcome, one thing is certain: the most brutal, yet most fascinating, supply chain "endgame" in Chinese retail has just begun.
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